The next time you go shopping for a high definition television, don't be surprised to find that TVs from Sony and Samsung consistently cost more than the competition. The reason, according to a report in The Wall Street Journal, is that both are forcing new policies on retailers forbidding them from advertising or selling TV sets for less than predetermined price points by each respective manufacturer. The policies apply to both online and brick-and-mortar sales.
Tough times have hit the TV industry, and for the third consecutive year, the average selling price (ASP) for flat-panel TVs has taken a backwards slide, dropping to $545 in 2011, down 15 percent from $644 in 2009. Meanwhile, the average panel size is going up and now sits at 38 inches, up from 33 inches four years ago.
For the most part, it seems as though retailers are okay with these new policies. WSJ points out that sagging prices have hurt chains like Best Buy and Target, both of which face intense online competition. So what do online vendors think?
"This allows us to make a reasonable profit," Billy Abt, co-president of Abt Electronics, told WSJ.
According to Mr. Abt, profit margins are sometimes as low as $10 on some $2,000 sets.